SVXY ran straight up through the 23.6% fib and then petered out just underneath the 38.2% fib. But then it did not break down below the 23.6% fib. It just jerked around there sideways daring the shorts to come and attach. But there were few takers and so the market will likely feel that it is safe to make a run for a new high. I predict it will either get stopped at the 50% fib or more likely the 61.8% fib. It might even run all the way up to the top of the red line shown above in order to close that 3rd of 3rd gap. But then the reversal should be brutal as the shorts emerge from their watery hiding places and attack the completely over-leveraged longs. With so much leverage already in play there will be little if any powder to fend off the attack and so I expect to start seeing wildebeests floating down river starting late this week or perhaps early next week. The market will likely make anyone who wants to be short this market hold over the weekend lest they lose out on a Monday AM sell off.
If SVXY breaks to a higher high tomorrow I will buy it and then set my stops just below the "b" wave shown above.
Folks, the critical inflection point for the current high level model will soon be upon us. Shares will either break to a higher high or they will turn around after wave 2 is complete and they will turn down. Ponzi schemes do not plateau. Wall St. does not make any money unless stocks are moving and so, fellow gamblers, stocks will move. I will be watching the waves but you should know by now that I strongly believe we are already in a new bear market even if it is not official yet.
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